Correlation Between Green Dot and FirstCash
Can any of the company-specific risk be diversified away by investing in both Green Dot and FirstCash at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Green Dot and FirstCash into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Green Dot and FirstCash, you can compare the effects of market volatilities on Green Dot and FirstCash and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Green Dot with a short position of FirstCash. Check out your portfolio center. Please also check ongoing floating volatility patterns of Green Dot and FirstCash.
Diversification Opportunities for Green Dot and FirstCash
Average diversification
The 3 months correlation between Green and FirstCash is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Green Dot and FirstCash in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FirstCash and Green Dot is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Green Dot are associated (or correlated) with FirstCash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FirstCash has no effect on the direction of Green Dot i.e., Green Dot and FirstCash go up and down completely randomly.
Pair Corralation between Green Dot and FirstCash
Given the investment horizon of 90 days Green Dot is expected to under-perform the FirstCash. In addition to that, Green Dot is 2.05 times more volatile than FirstCash. It trades about -0.01 of its total potential returns per unit of risk. FirstCash is currently generating about 0.04 per unit of volatility. If you would invest 8,443 in FirstCash on August 26, 2024 and sell it today you would earn a total of 1,997 from holding FirstCash or generate 23.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Green Dot vs. FirstCash
Performance |
| Timeline |
| Green Dot |
| FirstCash |
Green Dot and FirstCash Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Green Dot and FirstCash
The main advantage of trading using opposite Green Dot and FirstCash positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Green Dot position performs unexpectedly, FirstCash can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in FirstCash will offset losses from the drop in FirstCash's long position.| Green Dot vs. Guidewire Software | Green Dot vs. Envestnet | Green Dot vs. Evertec | Green Dot vs. Axos Financial |
| FirstCash vs. World Acceptance | FirstCash vs. Enova International | FirstCash vs. Green Dot | FirstCash vs. Medallion Financial Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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